Bharat Coking Coal Ltd. Vs ACIT (ITAT Ranchi)
Bharat Coking Coal Ltd. Wins Major Relief on Contract Payments; Revenue Appeals Dismissed
The Income Tax Appellate Tribunal (ITAT), Ranchi Bench, decided cross-appeals and cross-objections involving M/s Bharat Coking Coal Ltd. (BCCL) and the Revenue for AYs 2009-10, 2011-12 and 2012-13. The Tribunal largely ruled in favour of the assessee and dismissed the Revenue’s appeals.
Key findings include:
- Unabsorbed Depreciation:
- Following its own earlier decision and the Gujarat High Court ruling in General Motors India Pvt. Ltd., the Tribunal upheld that unabsorbed depreciation is eligible for carry forward and set-off without time limit post the Finance Act, 2001. Revenue’s ground was rejected.
- Unpaid Contractual Liabilities:
- Where bills were received and work executed during the year, mere non-payment did not render the liability contingent. Relying on Bharat Earth Movers (SC), the Tribunal confirmed allowability of such expenses.
- Section 14A Disallowance:
- As BCCL had sufficient interest-free funds, no disallowance under Rule 8D was warranted. Earlier coordinate bench decisions in BCCL’s own case were followed.
- Major Addition on Contract Payments (Kustore Area – L.B. Singh Group):
- The Tribunal deleted huge additions made on the allegation that no work was done by contractors. It held that:
- BCCL followed due tendering and verification procedures as a PSU.
- Payments were supported by contracts and bills.
- Revenue taxed the same receipts as business income in contractors’ hands and could not simultaneously treat them as non-business in BCCL’s hands.
- Additions exceeded actual payments, showing arbitrariness.
Hence, the disallowance was unsustainable.
Paid content
Become a Premium Member, or log in if you are already a Premium member.
